M/S Edge Solutions vs. The Joint Commisioner Of Central Tax

WP/19728/2026HC KarnatakaGSTCNR KAHC01043558202601 July 2026Bench: B M SHYAM PRASAD8 pages

For Petitioner: SRI. SANDEEP HUILGOL., ADVOCATEFor Respondent: SRI.ARAVIND V CHAVAN., ADVOCATE

AI SummaryRemanded

Facts

The petitioner challenged an adjudication order denying Input Tax Credit (ITC) due to a mismatch between GSTR-2A and GSTR-3B. A previous writ petition challenging the Show Cause Notice on procedural grounds was set aside by a Division Bench, restoring the adjudication order. The petitioner argued that GSTR-2A does not reflect ITC from Customs Duty, IGST under Reverse Charge Mechanism, and SEZ procurements, leading to the alleged mismatch.

Held

The High Court quashed the adjudication order, granting the petitioner eight weeks to file a detailed month-wise and tax-wise reconciliation explaining the mismatch between GSTR-2A and GSTR-3B. The first respondent was directed to extend a personal hearing if the petitioner requests it after filing the reconciliation.

Key Issues

Whether the denial of Input Tax Credit solely based on a mismatch between GSTR-2A and GSTR-3B is valid, considering that GSTR-2A may not capture ITC related to imports, Reverse Charge Mechanism, and SEZ procurements.

Sections Cited

Section 73, Section 74

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

- 1 - HC-KAR NC: 2026:KHC:32572 WP No. 19728 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1ST DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 19728 OF 2026 (T-RES) BETWEEN: M/S EDGE SOLUTIONS A REGISTERED PARTNERSHIP FIRM HAVING ITS REGISTERED OFFICE AT NO. 91, LAKSHMI NIVASA GROUND AND 2ND FLOOR 5TH CROSS, BULLET KRISHNAPPA LAYOUT KODIGEHALLI MAIN ROAD, VIDYARANYAPURA BANGALORE 560 097. ALSO AT NO. 167-168, 10TH MAIN 3RD PHASE, PEENYA INDUSTRIAL AREA BENGALURU 560 058. REPRESENTED HEREIN BY ITS PARTNER MR. GURURAJA SUBBARAO AT NO 105. NORTH BLOCK, SATYA GREEN APARTMENT BK LAYOUT, THINDLU, BANGALORE-560097. …PETITIONER (BY SRI. SANDEEP HUILGOL., ADVOCATE) Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:32572 WP No. 19728 of 2026 AND: 1. THE JOINT COMMISIONER OF CENTRAL TAX BENGALURU NORTH COMMISSIONERATE HMT BHAVAN, GANGA NAGAR BENGALURU 560 032. 2. THE ADDITIONAL COMMISSIONER OF CENTRAL TAX, HPU, BENGALURU NORTH COMMISSIONERATE HMT BHAVAN, GANGA NAGAR BENGALURU 560 032. 3. THE UNION OF INDIA REPRESENTED HEREIN BY THE SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE KARTAVYA BHAVAN, NEW DELHI- 110 01. …RESPONDENTS (BY SRI.ARAVIND V CHAVAN., ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE IMPUGNED ORDER DATED 20.06.2022 BEARING OIO NO. 06/GST/2022-23 AND DIN 2022055700000016081D PASSED BY THE 1ST RESPONDENT UNDER SECTION 74 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017, FOR THE TAX PERIODS JULY 2017 TO MARCH 2020, TO THE EXTENT QUESTIONED HEREIN - 3 - HC-KAR NC: 2026:KHC:32572 WP No. 19728 of 2026 (ANNEXURE A); (II) DECLARING THAT THE DENIAL OF INPUT TAX CREDIT TO THE PETITIONER SOLELY ON THE BASIS OF A MERE MISMATCH BETWEEN THE DETAILS OF INPUT TAX CREDIT THAT WERE AUTO- POPULATED IN ITS FORMS GSTR-2A AND WHICH IT RIGHTLY CLAIMED IN ITS FORMS GSTR-3B, IS UNCONSTITUTIONAL, ARBITRARY AND ULTRA VIRES THE SCHEME AND OBJECT OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017, AND KARNATAKA GOODS AND SERVICES TAX ACT, 2017. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD

ORAL ORDER

The petitioner has called in question the Adjudication Order dated 20.06.2022 [Annexure-A], and the petitioner has also sought for declaration that the denial of the Input Tax Credit [ITC] to the petitioner solely on the basis of a mismatch between the details of the ITC in its Forms GSTR-2A and GSTR-3B is bad in law. The petitioner had called this Order in question in the writ petition in W.P. HC-KAR NC: 2026:KHC:32572 No.22647/2022 inter alia on the ground that a single Show Cause Notice was issued for different tax periods [between July 2017 and March 2020]. This writ petition is allowed by the Order dated 17.12.2025, and with the Revenue carrying this order in appeal in W.A. No.1166/2026 [as it had other Orders also on similar grounds], a Division Bench by the Judgment dated 24.04.2026 has set aside the order in the writ petition restoring both the Show Cause Notice and the impugned Adjudication Order answering against the petitioner on its grievance with a single Show Cause Notice for different tax periods.

The first respondent has opined that the difference between the Forms GSTR-2A and GSTR-3B is crucial because though the month-wise or tax-wise difference is clearly set out in the Show Cause Notice, the petitioner has neither in the Reply nor during the personal hearing submitted month-wise or tax-wise reconciliation for the differential ITC. Sri Sandeep HC-KAR NC: 2026:KHC:32572 Huilgol, the learned counsel for the petitioner, submits that: [a] the first respondent should have examined the petitioner's specific case that the Customs Duty and the Integrated Goods and Services Tax [IGST] under Reverse Charge Mechanism on clearance of goods from the Customs are not part of Form GSTR-2A and therefore there is a difference as alleged, [b] because the portal maintained by the Customs Department was not calibrated with the GST portal, there is an auto calculation in Form GSTR-3B, and [c] this Court, because of this reason in the writ petition in W.P. No.11918/20241 has observed that Form GSTR-2A was designed to take only the details of the suppliers in 1 This petition is disposed by the Order dated 30.04.2026 HC-KAR NC: 2026:KHC:32572 India and their supplies, and not the details relating to import of goods and services and SEZ procurements.

Sri Aravind V Chavan, a learned standing counsel who accepts notice for the respondents, is heard for disposal.

This Court must observe that if the Form GSTR- 2A was not designed to take details relating to import of goods and services and SEZ procurements until 01.01.2021, that would be a relevant circumstance which must be considered as would be the fact that the petitioner has referred to the IGST paid under Reverse Charge Mechanism. When queried, Sri Sandeep Huilgol is categorical in stating that the petitioner can indeed furnish a reconciliation that would demonstrate that there is no mismatch to justify the proceedings either under Section 73 or 74 of the CGST/KGST Act. In the circumstances, this Court is inclined to interfere with the Adjudication HC-KAR NC: 2026:KHC:32572 Order dated 20.06.2022 and restore the proceedings with liberty to the petitioner to file, within eight [8] weeks from today, a complete reconciliation to explain the mismatch between Forms GSTR-2A and GSTR-3B. As such, the following. ORDER [a] The petition is allowed-in-part.

[b] The Adjudication Order dated 20.06.2022 [Annexure-A] is quashed.

[c] The petitioner is reserved with liberty to file a detailed reconciliation of the month-wise and tax-wise difference between the ITC availed in Form GSTR-3B and as reflected in Form GSTR-2A with the first respondent within eight [8] weeks from today.

[d] The first respondent is called upon to extend a personal hearing as part of HC-KAR NC: 2026:KHC:32572 the further submissions, if the petitioner makes a request for such hearing on reconciliation. (B M SHYAM PRASAD) JUDGE

AN/-

Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.